Operations

Derive Reaches Emissions Settlement with Feds

Derive Systems has agreed to a $300,000 civil penalty and estimates that it will spend about $6.25 million to address a federal complaint that it sold engine control devices designed to override the emissions control systems of vehicles in violation of the Clean Air Act.

The Florida-based company, which settled with the U.S. Environmental Protection Agency and U.S. Department of Justice, said in a statement that it didn't sell defeat devices.

The engine tuning products were sold under the Bully Dog and SCT brands for use in gasoline and diesel-powered vehicles. The tuners and Advantage software were able to access and overwrite the manufacturer's software.

Derive also offers its idle-management and telematics product Derive VQ, which includes an OBD-II plug-in device, to commercial and government fleets. Derive VQ wasn't included in the settlement, and complies with EPA regulations, according to the company.

Under the terms of the settlement, Derive must bring its products into compliance, said Jeffrey Wood, acting assistant attorney general for the Justice Department's Environment and Natural Resources Division.

"Tremendous progress has been made and the air is much cleaner today across the nation," Wood said. "Unfortunately, not everyone is playing by the rules. Today's settlement will bring Derive Systems and its aftermarket products into compliance with the Clean Air Act, and demonstrates to other manufacturers that products designed to unlawfully thwart vehicle emissions control systems will not be tolerated."

The settlement resolves claims about several Derive products that were developed by companies prior to Derive's acquisition of them, according to the company. Derive acquired SCT and Bully Dog in 2014.

"We are committed to continued cooperation and a partnership with the EPA in the effort to serve our industry and guarantee that standards and practices remain current as automotive aftermarket technology advances," said David Thawley, CEO of Derive Systems. "We look forward to applying the enhanced practices and procedures within our operations and across our brand portfolio and to our continuing leadership position in encouraging the industry to similarly embrace strong environmental performance."

In addition to the fine, Derive estimates it will spend about $6.25 million on training for customers, testing of preloaded tunes, and building of a compliance team over the next few years. The agreement doesn't require Derive to recall existing products or stop selling its products.

"Our goal with EPA was to find a mutually beneficial solution while continuing to be able to deliver valued products to our loyal customers," Thawley said. "Today, I firmly believe we've achieved both and, in doing so, are fulfilling our mission to bring technology innovation to every vehicle on the road."

Derive filed lawsuits in Utah against the former owners of Bully Dog and EZ Lynk in 2016.

The settlement is expected to be finalized by a federal judge by the end of the year.

Derive Systems is headquartered in Sanford, Florida, and maintains offices in Broomfield, Colorado, and Pocatello, Idaho.

Unlike passenger vehicles, which require biennial smog checks in California, heavy-duty diesel trucks are not currently required to undergo regular emissions testing. That might change with the introduction of a bill in the state Senate.

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